Professional Documents
Culture Documents
ENTERS
BIOPHARMA
SPECIAL REPORT
INTRODUCING BLOCKCHAIN
TECHNOLOGY
PAGE 3-11
UNVEILING BIOIPSEEDS -
TAIWAN’S BLOCKCHAIN/LIFE SCIENCES
EXPERIMENT
PAGE 12
CONTENTS
— August 2017
BLOCKCHAIN:
WHAT? WHY?
HOW? 3 INTRODUCING BLOCKCHAIN: WHAT? WHY?
Cover story HOW?
3
3 The Paradigm Shifts Again?
4 Unmasking Blockchain
6 Disruption by Stealth
8 Decidedly Tamper-Proof
12 BOOSTING INTERNATIONAL
Interviews with key COLLABORATION INTERVIEW
stakeholders Carol Cheng, TRPMA
12, 16, 18, 24, 26
14 CASE STUDY FEATURE Taiwan’s
Blockchain-Biotech Experiment
26 ACADEMIA-INDUSTRY COLLABORATION
INTERVIEW Nagumo Shunchiro, Japan Research
Institute
The special report was produced by PharmaBoardroom. For exclusive interviews and more info, please log onto
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INTRODUCING BLOCKCHAIN
The What? Why? & How?
BLOCKCHAIN
WHAT? WHY? HOW?
THE PARADIGM SHIFTS AGAIN? for this nascent technology. “Over the last four to
five years, over a billion US dollars has been invested
To most people, the obscure phenomenon known as by venture capitalists into blockchain companies, so
“blockchain” remains an ephemeral and evanescent the sheer energy and commitment being dedicated to
concept, clouded by its underlying associations to the this tells you that things are going to pop,” exclaims
digital cryptocurrency, Bitcoin, and the murky world Karim Lakhani, professor at Harvard Business School,
of the “darknet,” underground online bazaars where co-founder of the HBS Digital Initiative and a director
hidden services can be traded under a veil of anonym- on the board of Mozilla. “Moreover some of the most
ity. For futurologists, however, the advent of block- conservative strata in our economy such as the bank-
chain technology represents a markedly potent inno- ing community have been embracing or pushing hard
vation that promises to have vast ramifications for the to figure out how to incorporate blockchain meth-
way that mankind interacts. odology into their business models… and if the most
In the words of DAVOS founder, Klaus Schwab, conservative institutions constitute the first movers,
“we are on the cusp of a fourth industrial revolu- then that’s a pretty surefire indication that we’re onto
tion, of the kind that will radically reconfigure the something really big,” he shrewdly asserts.
world as we know it.” Schwab identifies three deci-
sive game-changers that altered the course of histo-
ry: namely the inventions of steam, electricity and
the Internet. Each, in its own way, broadened man’s UNMASKING BLOCKCHAIN
horizons and enhanced his capabilities by doing away
with the distance, power and knowledge gaps that had Contrary to its apparent complexity, blockchain is, in
hitherto so inhibited human and economic develop- actual fact, little more than a novel type of database
ment trajectories. for recording transactions. It is effectively a compre-
Right now, believes Schwab, a welter of cutting-edge hensive, up-to-date accounting record of who holds
digital technologies are upon us, the confluence of what or an audit chain of who transferred what to
which constitutes the fourth such gamer-changer. whom. What distinguishes the blockchain from tradi-
These encompass artificial intelligence, autonomous tional forms of ledger, however, are a handful of high-
robotics, the Internet of Things, 3D printing and ly unusual and striking features.
much else besides. However, at the beating heart of Chief among these special characteristics is the
this “deep digital transformation,” lies the blockchain. fact that it’s a record-keeping system that does away
Already investors from across a wide spectrum of with the need for centralized governance architecture.
industries have been demonstrating their enthusiasm Rather than relying upon a single, central authority to
1st: 2nd:
Steam Electrical
power power
MECHANIZATION INDUSTRIAL
BREAKTHROUGHS
3rd:
OF MANKIND Computing
power
4th:
BLOCKCHAIN
AUTOMATION
TRUST
preside over the records, ensuring both their verac- transactions are recorded under the glare of the
ity and their update, blockchains decentralize and public spotlight, the individual parties themselves
share the ledger, so that each user holds a copy of it. can potentially remain anonymous or even pseudon-
Anyone can request that any transaction be added to ymous. “The trick of blockchain is that it preserves
the blockchain, but transactions are only accepted the transaction history by making it public, but
if a majority of the users concur that it is legitimate. the parties involved don’t necessarily have to reveal
This peer-to-peer functionality thus revolutionizes themselves within this public blockchain setting,”
the art of record keeping by effectively abolishing the explains Lakhani. This is because a blockchain har-
requirement for trusted intermediaries, whether that nesses cryptography and digital signatures, which
be the brokerage firms, accountants, banks, auditors, can prove identity, while simultaneously preserving
lawyers or any other kind of oversight middleman. the anonymity, if necessary, of the real life identities
In the words of Professor Lakhani, “we’re talk- behind the cryptographic ones.
ing about a fundamentally re-conceptualized style Then there is the aspect of the sheer ‘immutabil-
of recordkeeping system that can keep track of any ity’ of the data being stored and recorded. Precisely
type of transaction between two parties, but simul- because interactions within the blockchain become
taneously distribute those same records to any inter- known to all participants and require verification
ested party that is part of the network. Throughout by the entire network before information is added,
history, we’ve kept ledgers private and now we’re the resulting product is a highly immutable audit
going to keep them open and accessible!” trail of all interactions. This integrity of the data
Another defining hallmark is the advanced pro- is ensured by the way that it is embedded into the
tection afforded to users’ identity. Though all entire community.
Firstly, each record is assigned a unique key, timestamp record. Any attempt to tamper with an existing record
and signature of the party that wrote it. Secondly every would become immediately and obviously apparent.
new record is bound to the previous one creating a sequen-
tial dependency between one record and another, in effect
chaining them all together. Moreover, when a new trans-
action or record update is posted on the network between DISRUPTION BY STEALTH
two parties, other nodes on the network immediately set
about solving the mathematical proof that locks that The layman may justifiably be forgiven for wonder-
transaction into everybody else’s ledger as well. The end ing why something so mundane as a shared public
result is a consensus around the ‘correct’ version of the record-keeping database should be causing such as stir
Data in a blockchain is stored in fixed structures called ‘blocks’. The core components of each block are its ‘header’
(composed of metadata, such as a unique block reference number, a timestamp and a link back to the previous
block) and its ‘content’ (typically a validated list of digital assets and instruction statements, such as transactions
made, their amounts and the addresses of the parties to those transactions).
Transactions thus contain a built-in identity mechanism — a cryptographically secure public-private key pair — used
to associate activity on the network with a specific participant (e.g., person, entity, device). By itself, the key pair is
pseudonymous, not revealing the participant’s actual identity. However, supplemental information, such as name,
contact information, or professional credentials, can be associated with a key pair, merging on-chain and off-chain
identities. In this way, in a health care context, a blockchain’s unique identity mechanism could nonetheless provide
the foundation for a unified patient ID across payers and providers. Cryptographic identities can of course also be
tied back to real life identities through a degree of reverse engineering.
Blockchain relies on established cryptographic techniques to allow each participant in a network to interact (e.g.
store, exchange, and view information), without preexisting trust between the parties. The defining hallmark of this
database of data is that it is not maintained by a single entity, such as a bank or government agency, but instead
collectively by the users themselves. Identical copies of the ledger database are downloaded from the internet in
close to real-time and made available to all users and participants of a peer-to-peer network through their compu-
ters (known as ‘nodes’).
The blockchain develops its record database by harnessing the participants of the network to reach consensus: the
participants deploy their computers to authenticate and verify each new block – for example, to ensure that the
same transaction does not occur more than once. The network can only adopt new blocks once a majority of its
participants agree that they are valid (that is 51% or more of the nodes). Amending historical records is intentionally
complicated: though all data can be read and new data can be written, records that exists earlier in a blockchain
cannot in theory be altered except where the rules embedded within the protocol allow such changes – for instan-
ce, by requiring more than 50% of the network to agree on a change.
The lifeblood of the entire process is actually cryptography which authenticates parties’ identities, creates immu-
table digests (also known as ‘hashes’) of each ledger record, and produces the current page of records (i.e. the
block) along with the binding that ‘chains’ each block to the earlier ones. The end outcome is an immutable record
of peer-to-peer transactions built from linked transaction blocks and stored in a digital ledger.
Closed centralised Internet of Things (IoT) networks gave way to open access networks managed via a centralised cloud.
Blockchain is outgrowing its adolescent cryptocurrency identity and assuming the role of decentralised gatekeeper in a
landscape of multiple distributed clouds and devices.
Source: IBM Institute for Business Value 2015
mankind still manages to trans- common to be transacting not with a global representation of
act over USD 100 trillion worth just with other people, but also truth,” he explains. “Blockchain
of deals every year between some with smart devices and machines. transactions are secure, trusted
seven billion people. Yet, to date, “Identity fraud is rampant and all and instantaneous because the
organizations and individuals those new devices introduce more distributed ledger reduces verifi-
have been operating in a trust risks into the equation: by 2020 cation timeframes and the need
vacuum and, to try and partial- we will have seven times more for settlement, while eliminating
ly compensate for that, they have smart devices than human beings entirely the necessity for dou-
been deploying a type of dou- in the world that we will transact ble-sided accounting, and any
ble-sided accounting to coordi- with!” affirms Etwaru. dependence on trusted third par-
nate the transfer of value between Blockchain, however, radical- ties to manufacture trust.”
each other via multiple proprie- ly reshuff les the rules. This is The time and cost eff icien-
tary ledgers. because organizations operat- cies generated are considera-
Because they make the assump- ing on a blockchain do so in the ble. So-called “smart contracts,”
tion that the other party’s ledgers abundance of trust. “The block- for example, can be configured
are not to be trusted, they resort chain lets people who have no which determine that when a
to some kind of neutral third particular conf idence in each piece of work is complete, or a
party central authority for vali- other collaborate without hav- transaction is met, then auto-
dation; often at considerable cost ing to go through a neutral cen- matically the law of the contract
and time delays. All sorts of mid- tral authority. Simply put, it is a is executed and the requisite data
dlemen exist to fulfill this func- machine for creating trust… trust or value can be moved accord-
tion – brokers, auditors, banks and transparency are wired into ingly. Since blockchain records
etc. The trust deficit, however, has the system – via encryption, pri- are immutable and stored across
been becoming more and more vacy and consensus generation all participating users, recovery
acute given that it is increasingly tools – providing participants contingencies are also rendered
Knowledge Online
Companies Companies
Manufacturing Trust
Companies Companies
the differences between ‘vertical innovation’ which and public health budgets under increasing strain,
occurs within the parameters of an industry and the incentives for payers and providers to rational-
‘horizontal innovation’ that transcends those narrow ize the modus operandi of healthcare provision have
confines and simultaneously impacts multiple unre- never been greater. Fortunately blockchain technolo-
lated sectors: whereas the discovery of Penicillin is gy can become a powerful lever in containing costs,
an example of vertical innovation in the life scienc- reducing duplication and inefficiency, and generating
es arena, the invention of the wheel is much more of value for money.
a horizontal innovation as it transformed business In some cases, the extent of the waste under existing
models across the board,” he explains. systems is shocking. Deloitte, for example, estimates
“Whereas life sciences businesses have been com- that, in many advanced Western economies, as much
mendably innovative on the vertical dimension with as five to ten percent of health care costs prove to be
great advancements in genomics, targeted therapies fraudulent, resulting from excessive billing or charg-
and novel styles of health provision such as the advent es for non-performed services. The wastage accrued
of home care; the sector has not performed anything from wrongly prescribing due to incomplete patient
like as well along the horizontal innovation axis where information is likely to be far higher still. This is
the hurdles tend to be more cultural than purely scien- largely because most provider networks and health
tific…it is absolutely crucial that we collectively get this information exchanges continue to suffer from a dis-
right this time around because blockchain holds the tinct lack of coordination, transparency and interop-
potential to be even more impactful than the internet erability with providers reduced to possessing only
in terms of exchange of value,” he warns. a fragmented view of the patient and subsequently
struggling to deliver optimum treatment plans.
With so many systems within the healthcare
data ecosystem capturing and storing data in dif-
RETHINKING HEALTHCARE PROVISION ferent ways, fragmentation remains one of the pri-
mary disruptors to coordination and delivery of
With drug development costs for latest-generation care. GreyHealth Group recently reported that in
biologics and precision therapies rising exponentially the United States up to 60 percent of medication
Human Genome
Mapping
Stem Cells
Immunotherapy
“Vertical innovations” occur within industry sectors and build upon what’s been done before often offering some sort of
technical, scientific improvement or optimization. “Horizontal innovations” are game changers that simultaneously tran-
scend multiple industry sectors and represent a radically different way of doing the same thing. The transformation in this
case tends to be as much cultural as technical.
errors are caused at times of data of ‘longitudinal patient data’ has Taking supply chains as one exam-
transition. “never been as crucial as nowa- ple ripe for disruption, many con-
Rationalized and secure elec- days in an era where GP visits are temporary pharma firms strug-
tronic health record taking could, fast becoming a patient’s first sec- gle to track drugs through the
however, massively ameliorate this ond opinion with many patients development life cycle from clin-
situation. Today, in many instanc- having pre-diagnosed themselves ical trials all the way to the final
es, manual efforts are made to after consulting ‘Dr. Google’ purchaser, resulting in a deficit
reconcile medica l data across on the world wide web,” jokes of traceability and transparency.
clinics, hospitals, labs, pharma- Etwaru. Meanwhile the ability to demon-
cies, and insurance companies. The sort of swift tra nsac- strate the provenance of compo-
Such attempts tend to be doomed tion processing and automation nent compounds of pharmaceu-
to failure, however, because there actions that blockchains support tical drugs and parts for medical
is no single list of all the places could equally realize considera- devices is of increasing regulato-
where data can be found or of the ble efficiency gains. A simplified ry focus and can directly inf lu-
order in which it was entered. smart claim contract with pricing ence the chances of market access.
Were updates to a patient ’s terms atomically tied to the prod- Blockchain technology, however,
medications, health profile and uct definition could potentially be presents a ready made solution to
treatment pathways instead to be created in coordination with the this issue and can deliver practi-
inputted to an open-source, com- payer and provider and published cally foolproof visibility and end-
munity-wide, blockchain-backed to a blockchain in a transparent to-end traceability as a product
trusted ledger in which additions manner. Once the information is passes through the development
and subtractions to the medical submitted, adjudication would life cycle and traverses global sup-
record could be well understood take place in real time, on a claim ply chains.
and auditable across organiza- per claim basis triggering pay- In a similar vein, blockchain
tions, the end result would be per- ments automatically when certain capabilities can be mobilized and
fectly reconciled community-wide conditions would be met. applied to the clinical trials pro-
information about each patient, cess at a juncture in which esca-
with guaranteed integrity from lating costs is the norm. While
the moment of data generation to it is common to encounter phar-
the point of use, without the need INJECTING EFFICIENCY INTO ma f irms resorting to usage of
for time-intensive, resource-heavy THE PHARMA INDUSTRY expensive electronic data man-
and error-prone manual human agement tools for results track-
intervention. Nor is it merely the healthcare ing that frequently account for
Such a solution would mean- payers and providers that have as much as 10 percent of a trial’s
while enhance patient-centrici- found themselves f inancially overall cost, blockchain technol-
ty and enable holistic treatment squeezed in the prevailing eco- ogy could be mobilized to reverse
pathways. Rather than an individ- nomic climate. So too the phar- this cost trend through superior,
ual’s health profile containing frag- maceutical developers, many of more cost-effective data oversight.
mented, disparate, incompatible whom have had to face down Some proponents, for example,
pieces of information each owned dwindling profit margins as reg- argue that site monitoring can
by different entities, the blockchain ulatory frameworks become more become more robust at lower costs
solution would, by contrast, gener- stringent, time consuming and as soon as blockchain methodol-
ate a lifetime view of an individual, costly and as national health sys- ogies are introduced. “By grant-
with each individual’s blockchain tems forge ahead with austeri- ing site monitors read-only access
starting at birth and growing with ty programs. Again, block-chain to the cryptographically secure
each and every healthcare transac- inspired technologies herald sub- blockchain, monitors can control
tion. Gaining access to this type stantial performance gains. data quality and ensure patient
safety without necessarily having a full-time moni- trust mechanisms enabling patent offices to offer low-
tor on site,” note analysts at the strategic management cost ‘proof of existence’ services and early phase pro-
consultancy, Red Chalk Group. ject developers to rest easy about the security of their
Even biotechs and SMEs engaged at the cutting intellectual property. After all, blockchain presents the
edge of new discovery have much to celebrate about alluring possibility of publically recording the fact that
the advent of blockchain. Current patent systems a document existed without necessarily having to reveal
could be rendered more efficient through its enhanced any of its content. The prospects are thus manifold.
HOW IT WORKS
Validation
The transaction and the user’s status are validated
by the network of nodes using known algorithms
A transaction is
requested
This transaction is broadcast
to a P2P network consisting A verified transaction could involve contracts,
of computers, or’nodes’ records, cryptocurrency, or other information.
WHAT IS
BIOIPSEEDS?
J
ointly developed by the Taiwan Research-Based develop Taiwan’s ‘open innovation’ culture, as such a col-
Biopharmaceutical Manufacturers Association laborative approach, encompassing both academia and
(TRPMA) and industrial blockchain technolo- industry, hasn’t yet been embedded deep enough in the
gy services company DTCO, BioIPSeeds is the roots of our healthcare sector.”
first blockchain-based P2P platform where Although BioIPSeeds, the first application of block-
researchers and companies in the biopharmaceutical and chain technology in biotech R&D, has been developed in
life sciences fields can exchange early innovative concepts. Taiwan and so far only serves Taiwanese researchers, oth-
Through greater exchange of these early innovations, it is er countries are keen to get in on the act. Eric Delarge, the
hoped that they can be translated into applied knowledge general manager of French innovator Servier’s Japanese
and thereby further satisfy unmet medical needs. affiliate, explains, “BioIPSeeds actually perfectly embodies
BioIPSeeds aims to provide a new model for academ- the kind of pioneering tool that could benefit Japanese
ia-industry interaction by providing a safer and more researchers… I have no doubt that Japan-based research
trustful environment than currently exists. Carol Cheng, and incubation centers would be particularly interested
COO of TRPMA, explains that her organization was in accessing such a tool to promote their in-house devel-
moved to develop BioIPSeeds by the “crucial need to oped innovations.”
Post IP Projects
Researchers will post non-confidential information (IP Summary) for reference with indication
Notarize Intellectual Property (IP)
of partnership types such as licensing, technology transfer, co-development or fund raising.
Research data/IP can be notarized
by creating a hash code anchored Sign Online NDA
on blockchain, while researchers
Interested parties can sign an NDA online for confidential infor-
still keep all data privately.
mation. Signed NDAs are anchored on the blockchain perma-
nently and immutably.
Member Registration
New members are certified Exchange Data
in reality. Account users Confidential data will be encrypted and transferred to
will need to declare their ACADEMIA your designated receiver who has the key to decrypt
legitimacy on behalf of their the data file. All data exchange records are anchored on
institute. blockchain permanently and immutably.
INSIDER PICKS
“Intellectual property and scientific research have always en- FLAVIEN
joyed a complex relationship. BioIPSeeds is the first and most CHARLON
advanced use of blockchain technology in the domain of inte- —
llectual property exchange, and I believe this is precisely the Blockchain Scientist;
type of innovation that academia and the industry require to Founder and CEO,
push scientific collaboration to the next level.” Coinprism
INSIDER PICKS
“As a 30-year veteran of the US Food and Drug Adminis-
DR. MIN CHEN
tration and a global regulatory expert, I believe BioIPSeeds —
is exactly what the industry needs right now. Its innovative Former Acting Director for
platform not only mobilizes academia and medical resear- the Division of Pharmacov-
chers to be launched into the global marketplace, but it igilance in the Office of Sur-
veillance and Epidemiology,
also removes the traditional barriers to entry for compa-
United States Food and Drug
nies and investors, affording them an exclusive first-look Administration (FDA)
into the type of research and innovation being focused on.”
INSIDER PICKS
“The Taiwan government enjoys a steadfast track record in encouraging the usage of innova-
tive technology. BioIPSeeds, a biomedical IP Exchange Platform, has broken fresh ground in
terms of the creation of a brand new model of academia-industry collaboration. Leveraging
blockchain-inspired technology and deploying peer-to-peer modeling, the platform exhibits
new patterns of co-research, technology transfer, and fund-raising for the biotech sector. No-
tably it provides a pragmatic solution to the long-existing problem of conversion of academic
innovation into commercialized products.
My expectation is that BioIPSeeds will incite academia and industry to bring together DR. CHURN-SHIOUH
their biomedical research achievements with a view towards accelerating collaboration in the GAU
spheres of new product development, patent strategy, licensing and technology transfer. Fur- —
thermore, as a globally open platform, BioIPSeeds plays an important function in drawing the CEO, Center for Drug
world’s attention towards Taiwan’s blossoming biomedical research sector.” Evaluation, Taiwan
INSIDER PICKS
“Utilizing cutting-edge blockchain technology, TRPMA and DTCO have developed the
BioIPSeeds platform, through which academic institutions are able to share their current
research and development results, allowing biotech companies to easily search and find
projects of interest. BioIPSeeds provides not only a cost-effective NDA online signing
feature, but also confidential and traceable data transfer records. These are just a few
features that give BioIPSeed an advantageous edge. Furthermore, TLC aspires to iden-
tify potential candidates, explore collaboration possibilities, and enhance technology
transfer and patent monetization premises through the use of the platform’s IP Notary GEORGE YEH
functions. I eagerly await BioIPSeeds’ increasing presence on the global market, crea- —
President, Taiwan
ting win-win scenarios and bridging the worlds of research, industry and capital.” Liposome Company
IP we would like to see larger databases of useful infor- the field of artificial intelligence. This is interesting
mation. Whilst many companies seek early research for us because we have invested a lot of money in
applications, we are focussed on creating a platform artificial intelligence ($5Bn). We could use a pro-
where academia and industry can share innovative ide- gramme like this to encourage further research.
as. BioIPSeeds does exactly that and we hope it repre- We are also investing a lot in digital health infra-
sents a new era in biomedical collaboration. structure (over the last two or three years approxi-
Taiwan also has a very interesting project in mately $15Bn). That figure also includes telecom-
Emerging Stock Brand where the government permits munications but generally we are investing a lot in
biopharmaceutical firms to list before they are profita- research.
ble. Being able to go public before revealing profits has
encouraged firms to list early for access to easy financ- PBR: “The current state of health care records
ing. This has helped transform Taiwan into a particu- is disjointed and stovepiped due to a lack of com-
larly favourable destination for biotech IPOs. mon architectures and standards that would
Academia is yet to fully embrace the concept of open allow the safe transfer of sensitive information
innovation. Therefore, to bridge the gap between aca- among stakeholders in the system” (Deloitte).
demia and industry BioIPSeeds contains a P2P plat- This has been proven by the recent cyber-attacks
form which allows academia as well as biomedical on the NHS in the UK and globally.”
companies to integrate internal/external resourc- What can governments across the world and in
es and knowledge thus creating a variety of new Taiwan learn from this occurrence when ensur-
opportunities. ing health data safety?
PBR: The Ministry of Sci- FCS: As with any public health service, we have a
ence in South Korea has re- large database and security is obviously a key fac-
cently initiated the world’s first tor in its credibility but I would ask the following
blockchain pilot for insurance question. What system was the UK using? I only
payments (A blockchain plat- ask because it appears to be a privacy concern not a
form built between the insurer cyber security issue. Blockchain in terms of data se-
and the hospital. This will in curity is sufficient but one has to look at the transfer
turn enhance the efficiency of of medical data into another party’s hands. Privacy
this process while reducing the of information is what most health services and pa-
time taken for payments). IBM tients are concerned about. Information security
data shows that nine out of 10 is obviously an evolving government interest and
governments plan to invest in Taiwan is already developing stronger programmes
blockchain by 2018, how has with the aid of private organisations. Currently, the
Taiwan’s government been re- government is still hoping for further cyber security
sponding to the blockchain evolution before new initiatives are piloted. In fact,
technology? the government is also encouraging private sector
FCS: I think one of block- research in regards to data security. A leading uni-
chain’s best aspects is the fact versity has already started an investigation into the
it provides great support. It is improvement of cyber security in the field of medi-
also particularly advanced in cal information.
BRINGING
BLOCKCHAIN
TO BIOTECH
Jacob Lee, co-founder and CEO of DTCO, a Taiwan-based
company focused on industrial blockchain services, docu-
ments the disruptive impact that the development of block-
chain technology in the healthcare and life sciences sec-
tors could entail for both patients and healthcare providers. healthcare sector, closely working with industry experts
and associations quickly appeared to us as a critical suc-
cess factor. As part of our business model, holding a
deep understanding of the needs and issues faced by
Jacob Lee a given industry’s players is absolutely crucial: we are
blockchain experts, not drug development specialists,
DTCO for example. As we held the ambition to bring the block-
chain technology into the biopharmaceutical field, we
engaged with TRPMA [the association gathering 28
PBR: You co-founded blockchain-focused DTCO R&D-driven Taiwanese biotech companies, e.d.] and its
in October 2014, what is the area of expertise of the COO Carol Cheng to jointly identify the structural is-
company? sues that blockchain technology could solve within this
JACOB LEE (JL): Prior to founding DTCO, my team industry.
and I honed our skills in the financial services industry, At first, we explored a vast array of unmet indus-
including the development of stock trading software. try needs, ranging from drug traceability to personal
Furthermore, one of DTCO’s key advisors and consult- healthcare, but the opportunity of improving IP trans-
ants, Dublin-based Flavien Charlon, is a blockchain sci- fer between researchers and the international pharma
entist who invented the Open Assets Protocol (Bitcoin industry while fostering global open innovation ulti-
2.0), which empowers Bitcoin blockchain technology for mately caught our attention.
non-financial applications. As a company holding extensive experience in the
After having developed a Bitcoin wallet and few oth- development of blockchain-based platforms, including
er products in the financial services arena, we found out both non-financial and financial tools, we were able to
it would be more interesting to build new tools – based do proof of concept (POC) and swiftly design a proto-
on blockchain technology – that could be useful to oth- type, which eventually convinced TRPMA that DTCO
er industries; hence, we shifted our focus from financial was the right partner to develop such a pioneering
to non-financial applications. In the grand schemes of platform.
things, DTCO now operates as a technical bridge between
businesses and blockchain by providing blockchain-based PBR: When designing BioIPSeeds and its main
operating systems in a wide range of industries -including specificities, what were the main issues commonly
biopharma, healthcare, digital identity and crypto finance. associated with academia-industry collaboration
that you wanted to solve?
PBR: How did you end up developing BioIPSeeds, JL: First, it is extremely time-consuming for compa-
the first application of the blockchain technology in nies to access and evaluate early-stage projects devel-
the life sciences field? oped by all universities and research centers, which all
JL: When we decided to focus our efforts on bringing hold different databases. In the meantime, a significant
blockchain applications into new industries, such as the share of these universities’ databases are not regularly
updated due to the lack of dedicated human resources, say it differently, by eliminating the middleman, we ex-
rendering collaboration opportunities even more diffi- pect the blockchain technology to increase researchers’
cult to seize for the industry. On the other hand, when willingness to store and make visible their IP seeds on
a given company has identified a promising IP seed, its our platform.
transfer from academia to the company remains cum- The second aspect relates to security, as researchers
bersome and lengthy – without even mentioning all the want to ensure their IP seeds are safe and visible on the
required administrative steps as well as the language bar- market. The P2P decentralized structure of BioIPSeeds
rier. Finally, at the global level, there was only a very lim- leverages the security and reliability of the Bitcoin
ited number of online platforms gathering IP summaries Blockchain’s record keeping and tracking features which
– written in English – coming from a large number of re- provide the required feature set better than any central-
searchers and accessible to all countries and companies. ized database – as protected as it might be. As a matter
In this regard, our strategic thinking overarching the of fact, Bitcoin already gathers more than 6,000 nodes
development of BioIPSeeds is the following: to pro- (or computers) within its network as we speak. Given the
tect the interest of life sciences and healthcare-related computing capacity needed to hack such a dense and at
researchers and increase the visibility of their IP seeds by the same time powerful network, BioIPSeeds’ data record
building a collaboration-oriented platform that would be security is immutable.
extremely safe, flexible, and cost-efficient. Fulfilling such Finally, we identified that a blockchain-based plat-
objective was no bed of roses. Actually, even by leveraging form could help IP and patent authorities to stream-
the blockchain technology, we had to face tremendous line their processes, by providing so-called “blockchain
challenges when designing BioIPSeeds. Without entering evidence” of the IP transfer from academia to the indus-
into too deep technicalities, this platform now proudly try. Apart from some pioneering states in the US, most
stands as a very complex, hybrid tool, which combines a national and international law hasn’t yet been able to
Bitcoin blockchain (for the security brought by its decen- keep pace with the opportunities offered by blockchain
tralized P2P model) with a proprietary distributed ledger technology. Nevertheless, I expect that – in the very near
that decreases the marginal cost of each transaction and future – IP laws will start to catch up: digital signatures
their processing timelines. [such as for the online Non-Disclosure Agreement
(NDA) offered by BioIPSeeds, e.d] will be more large-
PBR: Why would a traditional database not be ly recognized by IP authorities all around the world
suitable to connect researchers’ IP seeds with the while governments will allow blockchain evidence
global healthcare industry? to be deemed admissible in courts without requiring
JL: Traditional databases require a centralized oper- the external help of a blockchain expert – which how-
ator to collect information. In this regard, researchers ever remains the norm so far. As a matter of fact, we
could be reluctant to provide any early stage, non-IP pro- are already closely liaising with Taiwan’s Intellectual
tected, and confidential information about their projects Property Office and striving to bolster their under-
to a middleman – especially for a platform that ultimate- standing of blockchain technology, while their sheer
ly aims to gather projects from all around the world. To interest in our platform is also very promising.
PROPERTIES
Autonomous
They run on their own, without any single entity or authority in charge.
Supervision over its workings is shared and decentralised across the en-
tire network.
Permanent
With the contents of the ledger replicated across multiple nodes, even
were a full 99 percent of the computers running it to be taken offline,
the records would still remain accessible and the network would rebuild
itself.
Secure
The ledgers are ‘cryptographically auditable’, meaning that the network
can be mathematically certain that the entries have not been forged.
Any tampering would become immediately obvious.
Open
Anyone can access, view and audit the code.
FUNCTIONS
Storing Digital Records
They permit unprecedented control of information not merely
through immutable records of transactions, but equally of digital
representations of physical assets.
Dis-intermediating Trust
Enable parties who do not have confidence in each other to tran-
sact directly on a peer-to-peer basis without needing to resort to
independent brokers or third-party intermediaries.
APPLICATIONS IN PHARMA
Supply Chain & Inventory Management
Alongside enhancing serialized track & trace capabilities for the external
supply chain, manufacturers would benefit from access to trusted digital le-
gers from the wholesalers so as to provide greater visibility into inventory
demand fluctuations.
Drug Co-Development
By registering their works to a blockchain, inventors can end up with tam-
per-proof evidence of IP ownership and biotech start-ups are empowered to
swiftly and securely access the funding and services they require to properly
commercialise their innovations.
Regulatory Submission
Blockchain has the potential to realise the dream of establishing an electro-
nic, interoperable system for marketing authorization submissions and upda-
tes. National regulatory authorities all over the globe would be able to access
a pharma company’s files thus smoothing market access timeframes.
LIMITATIONS
!
Vendor Lock-in
High switching costs afford blockchain vendors substantial control over their custo-
mers’ data and inordinate pricing power. The risk is that this state of affairs might
degenerate into a proliferation of new data silos where customers are locked into
renting access from vendors.
Regulatory Inertia
Regulatory and legal frameworks have been struggling to keep pace with the advent
of blockchain technology and many gaps persist in the rulebook. The decentralised,
cross-boundary character of blockchain raises jurisdictional issues that have yet to be
adequately resolved.
Storage inefficiency
Given that data stored on the blockchain is duplicated at each node, it is not efficient
for storing large quantities of data. On the contrary, blockchain is more fit-for-purpo-
se in terms of connecting off-chain data stores, and acting essentially as an identity
and permissioning fabric. Nevertheless concerns persist over the considerable com-
puting power blockchain consumers face to process transactions.
Immature infrastructure
Blockchain technology is still in its infancy and much of this fledgling technology is
X not yet ready for mainstream deployment. Many of the proof-of-concepts have yet
to evolve into production.
BLOCKCHAIN
& BIOTECH:
HAPPY
BEDFELLOWS
W
hile payers and healthcare providers researchers could be very reluctant to provide any early
marvel at blockchain technology’s stage, non-IP protected, and confidential information
potential to revolutionize patient med- about their projects to a middleman and, in this climate
ical record keeping and Big Pharma of distrust, the stages for transferring technology from
lauds the new methodologies for they academia to industry have often been exceptionally
way in which they can optimize and radically transform cumbersome and lengthy,” explains Lee.
supply networks, the “new order” is also very welcome Indeed, many entrepreneurs complain that ownership
news for the myriad of researchers and biotech start- of their early-stage projects can be tricky to prove and,
ups engaged in the initial drug discovery process. This with no adequate means for authors to catalogue their
is because blockchain-inspired systems can go a long works, it can sometimes be difficult for them to see who
way to creating the sort of entrepreneurial marketplace is using their intellectual property and equally for third
and global intellectual property exchange that they have parties to ascertain whom to seek a license from. The
always dreamed of. result of this is that original creators are often unable to
Whereas the advent of the Internet undoubtedly rep- stop infringements or to make the very most of mone-
resented a massive leap forward in terms of improving tizing their work.
connectivity and ease of access to information, a num- Blockchain methodologies, however, promise a poten-
ber of important deficiencies were never addressed. tial way out of this thicket of inconvenience, by setting
Inventors and IP holders have long been hampered in in motion a visible, traceable, and transparent process
commercializing and bringing their innovations to mar- that will enable pioneering start-ups to swiftly secure the
ket by the sheer lack of a dependable, secure and central- funding and services they need to properly and efficient-
ized means for collaboration. “In the past, it has been ly deliver up their inventions to the global marketplace.
extremely time-consuming for companies to access and Harnessing blockchain as an IP registry can help con-
evaluate early-stage projects developed by universities fer clarity to creators, owners and users alike. By regis-
and research centers, all of which maintain their own tering their works to a blockchain, inventors could end
isolated databases,” recalls Jacob Lee, co-founder and up with tamper-proof evidence of ownership. Moreover,
CEO of DTCO. “Scattered, hard-to-access information third parties could use the blockchain to visualise the
has tended to stand as a true hindrance to academia-in- complete chain of ownership of a work, including any
dustry collaboration at both national and international licences, sub-licences and assignments. Registering a
levels,” he confirms. work in this way furnishes the original author with a
Moreover, even in instances when a company or inves- digital certificate of authenticity.
tor has successfully identified what he or she considers Aside from those defensive IP benefits, blockchain
to be an attractive biotech prospect, the barriers and additionally offers real possibilities for licensing works
hurdles to completing business have still, in many cases, by reducing the cost and pace of transactions by creat-
proven formidable, often due to concerns over security ing a direct link between authors and users through the
and ownership. “Traditional databases require a cen- clever deployment of “smart contracts.” These essential-
tralized operator to collect information. In this regard, ly function via a computer program code that has the
ability to facilitate, self-execute and enforce the pre-pro- by multinational corporations and centralized govern-
grammed terms of a contract by itself, without the need ing bodies. Decentralized ledgers should go some way
to resort to intermediaries and additional overseers. to empowering startups and foster so-called ‘mesh’
Acting similar to torrenting or other types of peer-to-peer landscape where smaller companies can compete with
systems, where thousands of computers simultaneously entrenched corporations through crowdsourcing, shared
work with the same data, the blockchain’s decentralized resources, and distributed governance.
divisibility and its capability to verify transactions with-
out third parties thus considerably abbreviates the time- TRADITIONAL VS BLOCKCHAIN DATABASES
frames required to conclude business.
Examples of platforms that seek to mobilize these fea- In many healthcare systems in the world, data is collected
tures are already starting to materialize. One such mech- in a centralized database. This design, while it may be effi-
cient for operators, has some design faults.
anism, BioIPSeeds, seeks to create a virtual marketplace
for the expansion and growth of biotechs, investors and 1. Unsecured. Records stored in a centralized data reposi-
service providers, in which all member Biotech assets and tory are very risky for every party involved in the informa-
initiatives will be recorded on a blockchain distributed tion flow. Such databases are prone to attacks and internal
leaks.
ledger. “Essentially we have managed to build a block-
chain-inspired platform to protect the interest of life 2. Lack of interoperability. Data becomes immobile and
sciences and healthcare-related researchers and increase usually in an unusable format when placed in different
healthcare enterprise hands. Interoperability allows diffe-
the visibility of their IP seeds by building a collabora- rent EMRs to speak to each other. In the case of healthcare
tion-oriented platform that is exceptionally safe, flexible, IoT solutions, it is especially important.
and cost-efficient,” recounts Lee, “and in addition to all
3. Little Patient Control. The healthcare enterprise is the
of that, it can demonstrably assist IP and patent author- data owner through collecting all this data while leaving
ities to streamline their processes, by delivering so-called the patient/user with little to no control. Furthermore,
blockchain evidence of the IP transfer from academia to given that cost and reliability comes with holding such
the industry.” data, the current system discourages smaller providers
from managing the health records collected or collecting
Carol Cheng, Chief Operation Officer of the Taiwan them at all.
Research-based Biopharmaceutical Manufacturers
Association (TRPMA) sheds light on the technical A healthcare system using Electronic Medical Records
(EMRs) or Personal Health Records (PHRs) based on a bloc-
aspects of how the process works. “With our BioIPSeeds kchain or distributed system design would be able to solve
platform, both the IP summary (non-confidential data) these problems. Such a system with a decentralized data
and the IP Notary (confidential data, including a proof repository and stronger security measures would be much
less susceptible to attack, since an attacker has to go after
of ownership) are safely anchored on both Bitcoin and each and every user on the network to get all the data.
Ethereum public blockchains with timestamps. When a
given IP draws the attention of a company, the latter can At the same time, a blockchain-enabled system gives the
request more information about it from the researcher option of data autonomy to more parties on the network.
This is especially true for patients - those who generated
directly through BioIPSeeds. If interested, the IP’s own- those records. A PHR System design in this way gives con-
er can then issue an online Non-Disclosure Agreement trol back to the individual rather than putting it in the hands
(NDA) that is also anchored on blockchains, rendering of Healthcare Enterprise. As the world is more data-driven
than ever, collecting such personal medical data across
this normally time-consuming part of the co-develop- multiple care providers becomes more valuable than ever.
ment process tremendously easy and convenient.”
The implications of this restructuring of the drug dis- Trusted shared truth across the network brings interope-
rability. Leveraging a shared time stamped ledger of the
covery and development sequence could be enormous. blockchain, EMRs can talk to each other. Any issue that
The use of blockchain technology may even disrupt requires a trusted network, such as patient identification,
the current balance of power between biotech start- patient consent for services/agreement on fees/drug trials/
ups or university spin-offs and the big pharmaceuti- research, provider user authorization, and even monitoring
and discovering billing fraud can now be automated and
cal giants. Traditional ‘hub-and-spoke’ industries like shared securely and easily.
the biotech sector have up until now been controlled
EMPOWERING
RESEARCHERS
Eric Delarge, general manager and representative
director of Servier Japan, recently became the first
member of the international pharma industry to join
BioIPSeeds. In this regard, he provides insights into
the main hurdles he faces as part of his scouting and
screening activities across the region, as well as his
expectations regarding the heightened collaboration
potential that a blockchain-based platform such as Bi-
oIPSeeds could offer.
COSTS
Group (SMFG). Through cooperation with SMFG
member companies, we also support M&A implemen-
tation and execution, to help those companies acquire
cutting-edge technologies, the effectiveness of which
has been proved by clinical or non-clinical trials.
Afterwards, our company helps them with pre-M&A
Nagumo Shunichiro, director and principal at the Japan
Research Institute, gives his take on the potential of Bi- strategy building, such as business due diligence.
oIPSeeds to help counteract the culture of secrecy in the Specifically, we help them to explore and identify
Japanese life sciences and foster greater collaboration those enterprises which can contribute to the growth
between industry and academia. of their business, then help them in strategy planning
after M&A, and clarify the risk and topics to be dealt
with in both the business and legal dimension.
Nagumo Shunchiro
PBR: What do you see as the potential of BioIP-
JAPAN RESEARCH Seeds, the new blockchain product coming out
INSTITUTE of Taiwan, which allows biotech researchers and
companies to share early innovative concepts?
NS: BioIPSeeds is a useful platform which helps fa-
PBR: Please introduce the Japan Research In- cilitate communication between researchers and the
stitute’s capabilities and offering and your role as people who are interested in certain technology seeds
director for business creation and the commercial- through non-confidential technology seeds informa-
ization of innovative technologies. tion or early innovative concepts summary disclosure.
NAGUMO SHUNCHIRO (NS): The Japan BioIPSeeds can create great value through significant-
Research Institute, Ltd (JRI) has two categories of cli- ly eliminating the communication costs between in-
ents: those with an existing footprint in the medical/ dustry and academia in Japan.
pharmaceutical business and those which do not, or Researchers and people from the development
have a rather short history in this business, but are try- department in Japanese enterprises, do not like
ing to increase their presence. We provide information the research and business in the field that they are
to our clients, especially those which are eager to start working on go public. For example, the represent-
up new healthcare businesses or are interested in in- atives from Japanese companies do not actively ask
novative technologies. questions or join discussion in academic seminars.
In terms of exploiting innovative technologies, for Representative from Japanese enterprises are eager to
those clients who already have a medical business, hear about presentations from the seminars, and tend
we help them with mid to long term R&D theme to exchange name cards after the sessions, then set
exploration and system-building or system usage to up a meeting on another day. From discussions with
improve the efficiency of their R&D theme manage- business development managers from pharmaceutical
ment. For those clients who do not have a medical companies, we found that they tend to get most of
business department or with poor experience in med- their information from one to one settings.
ical business, we help them on new business devel- Japanese companies tend to use the method of “not
opment, focusing on “technology selection through letting other companies notice their movement” to
analysis in the context of global trends,” “explora- approach researchers. This method carries high com-
tion of cutting edge technologies which may be a munication costs. The operating officer of the cor-
sustainable core business field,” and “exploration of porate planning department for a Japanese medical
technologies which contribute to problem-solving or device company indicated the problem of current
methodology as follows: “the current method for and to whom the information has been leaked. From
exploring business opportunities depends heavily on JRI’s perspective, this mechanism can not only deal
the person who is in charge. The scope setting relies with individual secrecy leaks, but also functions as
on the capability on this person and the target set- a suppression power to parties in the communica-
ting also depends on the personal interests and sense tion to lower the possibility of unintentional secrecy
of the person. It is very hard for a company to have an leaks.
overall picture in terms of technologies or business BioIPSeeds is also equipped with a firm security
exploitation.” This perception is shared by many of system, independent from the blockchain, to restrict
our clients. unauthorized access from third parties.
JRI regards BioIPSeeds as a useful tool for elimi- BioIPSeeds guarantees safety of communication
nating communication costs and an effective way and the traceability and suppression of unintention-
to conduct new technology exploration on a base of al secrecy leaks, contributing to lower the barrier
overall information. BioIPSeeds could be a solution between academia and Japanese companies, and to a
for solving the secretism of Japanese companies and certain extent eliminating the preliminary communi-
facilitate better communication. cation procedures. As a result, it can eliminate com-
BioIPSeeds is a platform using blockchain, the crit- munication costs.
ical technology which supports Bitcoin and other
virtual currencies. Blockchain is an electronic ledg- PBR: How can Japanese researchers leverage
er system and records all the history and the history BioIPSeeds to initiate collaborations?
cannot be manipulated. In other words, blockchain NS: BioIPSeeds has the potential to activate the
can also record all the “right transfers” in an unma- “preliminary communication” between academia and
nipulable manner. BioIPSeeds can record all the track enterprises. Specifically, when a company official de-
record of communications on the BioIPSeeds plat- cides to proceed with a certain kind of technology
form, as well as related knowhow and any communi- license in project negotiations or the discussion of
cation fragments related to rights. certain co-research projects are relatively mature, the
Japanese company sign strict confidentiality agree- enterprises which shows interest in certain technol-
ments for communication. Some staff in Japanese ogy seeds can use this as a communication tool to
companies indicate that “university professors often ask the technology holder a variety of questions to
work on co-development projects with certain com- identify the possibility of cooperation. We define this
panies and sometimes leak the idea to others.” In process as the “preliminary communication”.
this sense, they have a low level of trust of academ- There are several challenges that BioIPSeeds will
ia. It takes a long time to negotiate confidentiality face in achieving this functionality. Firstly, it will
agreements in many cases. The lack of trust is one of have to include abundant information on technolo-
the reasons why those companies choose high cost gy seeds information which has not been published
communication. in journals or patent information. Secondly, in order
As a solution to this suspicion from Japanese com- to guarantee the continual usage of the members of
panies, BioIPSeeds could function as a track record BioIPSeeds, a mechanism for ensuring that the infor-
for secrecy leaks. Commuication histories are record- mation is updated is required. Thirdly, a mechanism
ed and are accessible. In this sense, if any secrecy needs to be established to resolve the communication
leaks occur, the companies can find out when, who, gap between enterprises and academia.
LOREM IPSUM
LOCAL
DOLOR SIT
CONVERSATIONS
AMET
GLOBAL
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